With the Electronic Sports League (ESL) hosting its first ever arena-sized esports event in Australia this weekend, B&T was lucky enough to score an interview with Nick Vanzetti (managing director at ESL Australia) and Tim McGregor (managing director at TEG Live) to find out why this rapidly-growing market is one to watch for advertisers.
The esports market has certainly hit its stride of late overseas, and seems to be gaining some serious traction Down Under. What’s the secret to its recent success?
Nick: While certainly not a new phenomenon – esports has been bubbling away for about 20-plus years now – it has been steadily growing an audience fuelled by participation in gaming. It’s taken some time to reach critical mass, but a few factors have definitely accelerated us to this position.
Game developers and publishers once shied away from supporting esports, focusing on product launch sales year on year as opposed to creating a truly engaging multiplayer or esports experience for gamers. A changing games market economy, where a long-running franchise and sticky product is a real competitor to an annual release model means free-to-play, low-cost purchase models with micro-transactions are king. The publishers are able to sustain monetisation for years from an ‘old’ product, and one of the best ways to keep the fan engaged is through esports. Once the games industry titans truly embraced the potential of their own titles’ power to capture a loyal audience, the whole game development process has changed to retain and cultivate a growing esports fanbase.
Besides the obvious advances in infrastructure and technology for online gaming to become more readily adopted, the accessibility of content has been a game changer for our industry. Once upon a time there was a rabid esports community starved of content due to technology and budget limitations. Broadcasters weren’t running to tournament organisers to spread the content, but changes in the internet landscape in the late 2000s changed that. The introduction of live streaming services, such as Twitch.TV (now owned by Amazon) made this infinitely more feasible at low cost for companies like ours to broadcast our tournaments and content. It was only a matter of time before regular players and casual enthusiasts started to grow in numbers to tune in to see what esports was all about.
Tim: The financial numbers are becoming so substantial that eSports simply cannot continue to be considered some sort of underground hobby. Whether this is the 25 million people who have purchased CS:GO for around $20 (yes, that’s $500 million, which, by the way, completely dwarfs most blockbuster movie grosses or superstar music album releases) or the millions of dollars of prize money that players and teams can earn at major esports tournaments, this is the real deal. It is rapidly professionalising, it is of global scale and it has a passionate and engaged fanbase like any other sport – its success should not be a surprise to anyone. Just the other day it was announced that esports will be a medal event at the 2022 Asian Games, which by that time I expect will feel well and truly overdue.
What’s the target demographic for esports? Is it just Millennials?
Nick: Maybe for now, the Millennial tag is the best used to label the esports market with – they certainly make up the majority of our fanbase, but the industry and market is changing so quickly. While lower in numbers, there’s still a proportion of ‘old hats’ who are interested in esports, and as it is more widely understood, the spread is widening. The long-term takeaway is that esports isn’t a fad – as today’s Millennials or tomorrow’s digital natives grow older, esports fans will span across multiple segments.
What do esports offer advertisers that traditional advertisers don’t?
Tim: Everyone tells me the 18-to-24 male audience is tough for advertisers to access – well, here they are. Most importantly, as esports is in its infancy, there is still a strong opportunity to somewhat create the mould rather than enter later when the paradigm will probably be pretty set. Right now, it is good buying.
What types of advertisers does the esports market attract? Is it all just junk food and energy drink brands?
Tim: No. We have interest from every category, as they realise this is the future that they can, if they’re smart, access now. Intel, HyperX, Acer, Telstra, and Velocity have all jumped on board for the ESL event in Sydney this weekend.
What are the similarities and differences/challenges in promoting the ESL in Australia?
Nick: The ESL is a truly global company now, which is exciting, and it’s great to be a part of that. We learn from developments in other regions, whether it be Europe, North America, Latin America or Asia. We are able to look at what has worked (or didn’t) through the changes in the industry or other markets’ experimentation.
Australia is obviously a unique market geographically and in its own right, so we get to carry on fairly uninhibited with our own experimentation and development of our esports ecosystem, which is great.
Why was a traditional event promoter in TEG Live keen to branch out into the esports scene?
Tim: TEG Live brings major sport events like the Argentina versus Brazil soccer match at the MCG in June, the USA versus Canada ice hockey game in June, and the Stanford versus Rice college football game in August, so we are probably the biggest promoter of sport in this country outside of the established leagues such as the AFL, the NRL and the A-League. Esports has been in our sights for quite a while given the financial numbers I’ve mentioned. However, while I am a sport nut, I found the whole esports thing pretty bizarre – 10,000 people watching people play video games against each other? Then I went to Manila to an ESL One event for DOTA 2 (a game I had not even seen before) and was converted in about 20 minutes. The massive production, the professional commentary, the rock star entry of the players and the totally engaged, enthralled and responsive live audience – wow, it was completely amazing. So, a three-year deal with ESL to produce more esports mega events with huge prize money and the best players makes total sense to us at TEG Live.
How many Aussie teams are there that compete in esports internationally?
Nick: Breeding a strong portfolio of Aussie teams that can compete on the global stage has been tough, and that’s primarily due to local investment and status of our industry. Most competitive Aussie esports teams consist of uni students, full-time or part-time workers, which makes it hard to compete on the level of our international counterparts. A few key top-performing individuals or teams compete in the wider Asia-Pacific or North American regions. There is still some development to see here.
Australians love sport, enjoy the outdoors and a warm climate. Some of the world’s best esports players spend time indoors in colder countries like Korea or Sweden. You might think these factors form challenges for us in developing a growing base of esports players, but at ESL we believe in a balanced lifestyle and embracing traditional sport and activity. There are so many similarities with other sports, and some of the best esports personas are well physically trained, and often sport supporters. A healthy body helps a healthy mind and overall performance, so we want to see more immersion into this realm in the future.
What does the future hold for the Aussie esports market?
Nick: The future is certainly bright, as ESL and TEG Live brings to Australia the first mega event of its kind, with over 8,000 ticket holders about to enjoy the Intel Extreme Masters at Qudos Bank Arena this weekend, with a prize pool of US$200,000. This is a landmark occasion for our industry, and we’re excited to be putting Australia on the map in terms of global esports tournaments.
We will look to build on the successes of events like IEM Sydney and continue to provide great tournaments, content and opportunities for a growing audience of esports fans in Australia.
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